My HSBC 2nd mortgage negotiations round 3

[DaveFred]

BTW- i just found some recent postings out on the Net, where people are getting unsolicited settlement offers in the mail for underwater 2nds from HSBC for 3.5% of the balance. They are calling them Tax Time settlement specials, and appear to be Legit. Sounds like HSBC must be desperate, and inundated with defaults

If anyone else knows about these settlements please chime in

Hey Trouble,

Nothing really new here, I did get a another call last week but this time the lady just asked the usual questions and when I repeated my standard reply that I wont be paying anything unless or until I get a permanent solution she just said yes I see that here in the notes. She dis say that in another month or so they would have to charge off she was not sure what would happen next. I told here thanks for the information and she then told me that she would make a note in my file not to call back for 2 weeks since it was apparent that was not going to change my mind at this late date.
I am not too sure what to expect next since I am approaching uncharted waters and have no idea whether HSBC will offer me a settlement,keep it in house or sell to a junk debt collector.

I hope your sources are correct on HSBC starting to get desperate and settling these thing. Do you have a link to the net posts that you are referring too, I would love to read them.

By the way is your BK final?

Keep in touch, Dave.

[troubleinriverside]

Hey Trouble,

Nothing really new here, I did get a another call last week but this time the lady just asked the usual questions and when I repeated my standard reply that I wont be paying anything unless or until I get a permanent solution she just said yes I see that here in the notes. She dis say that in another month or so they would have to charge off she was not sure what would happen next. I told here thanks for the information and she then told me that she would make a note in my file not to call back for 2 weeks since it was apparent that was not going to change my mind at this late date.
I am not too sure what to expect next since I am approaching uncharted waters and have no idea whether HSBC will offer me a settlement,keep it in house or sell to a junk debt collector.

I hope your sources are correct on HSBC starting to get desperate and settling these thing. Do you have a link to the net posts that you are referring too, I would love to read them.

By the way is your BK final?

Keep in touch, Dave.

Yes on the BK, waiting for my discharge order this week.

If you Google HSBC 2nd mortgage settlement it will bring up a couple of websites i wont mention here, where people are discussing getting those offers in the mail recently.

[DaveFred]

Yesterday morning I got another call from HSBC. This time it was a real Miss nasty pants. After all the usual opening conversation stuff she gets right to the point and say to me "How do you intend to resolve your past due payments" I say well once again I don't have a solution other than to wait until you either decide to offer me a long term affordable loan mod or we wait for a settlement offer some time way down the line. She gets real nasty and say LOOK we do not SETTLE mortgages here and you signed a contract and we intend to collect on it. I said to her just as nasty. "Your contract gives you the right to foreclose if I don't pay and by all means go ahead and do it if you really want to push this instead of negotiating with me" She then goes into a rant about how its a my responsibility to pay and if I am refusing to pay they will have to take other action. I again told her that I was just waiting for them to make there next move before I decide whether to file BK and be done with it. She then ask me about my first (Citi) and I told here it was current and I have no problem with them, They gave me a permanent loan mod long ago and I intend to stay current until you (HSBC) decide not to work with me. She just kept saying so then you are refusing to pay and I say no I am willing to pay when it is affordable and it is a long term solution. She says it is my responsibility to figure out a solution and I should talk to the 1st about a short sale. I told her nope it does nothing for me to do a short sale since we are hopelessly upside down and I would rather just stop paying the first and let them have it or wait till you (HSBC) decide to take legal action. Either way my credit is in the tank and BK is looking more and more likely. She again says so you are refusing to pay. I say I guess you just are not listening please just do what ever you are going to do and let me move on, Bye click

[davephx]

The nasty call is typical of collection departments. They may get a percentage of judged for performance of how much they can get out of you.

If your totally underwater on the 1st it could cost the 2nd to foreclose and sell since they first have to pay off the 1st.

I don't think they have to charge off a mortgage. I haven't pay on my 2nd for over a year and got a NOD a year ago (BofA). They would lose a huge amount if they foreclosed and sold and have not written off yet - at least still getting collection calls from BofA.

A junk debt collector can't do anything more.

I don't recall if your in a deficiency state or not... that could be a complication but if your underwater enough and don't have huge other assets they should realize this.

I am not sure of this but even if your in a deficiency State I don't think they can come after you till after the foreclose sale and after they paid all the 1st off.

[troubleinriverside]

good post. Sounds like you just another of a series of collection agents. you did well. there job is to get you to say you refuse to pay, so they can record it. they are screwed, and they know it. if you continue to wait them out you might get on of those 3.5% settlement offers in the mail down the line. but it wont be until they are convinced you arent going to pay.

I continue to get Robo calls from HSBC, but when I answer, they hang up. My BK-7 was complete last week, both my 1st and 2nd are discharged. HSBC never even acknowledged that i filed, and i'm positive they were notified by the court.

In a thread on another Forum, there is a guy who claims to be a settlement agent for a bank, who claims they charge off after 6 month on the 2nds, and are content to just sit and wait until you call and settle, or you sell the house, but the important thing is for you to take the attitude that you care less and will walk at any time. if they sense any emotional ties to the property, it gives them the upper hand. they have to be convinced that you will stop paying your 1st at any time, and they will lose it all.

[DaveFred]

The nasty call is typical of collection departments. They may get a percentage of judged for performance of how much they can get out of you.

If your totally underwater on the 1st it could cost the 2nd to foreclose and sell since they first have to pay off the 1st.

I don't think they have to charge off a mortgage. I haven't pay on my 2nd for over a year and got a NOD a year ago (BofA). They would lose a huge amount if they foreclosed and sold and have not written off yet - at least still getting collection calls from BofA.

A junk debt collector can't do anything more.

I don't recall if your in a deficiency state or not... that could be a complication but if your underwater enough and don't have huge other assets they should realize this.

I am not sure of this but even if your in a deficiency State I don't think they can come after you till after the foreclose sale and after they paid all the 1st off.

It was most definitely a collections call and not anyone who was interested in anything but collecting money.

I will be 5 months delinquent in a few days so they will have to make a decision soon as to whether to Charge off turn it over to an there in house recovery department or turn it over to a junk debt collector.

I am in CA. and my 1st (CITI) is a purchase money loan so it is non deficiency loan but the 2nd (HSBC) is a recourse loan. As I understand it I would not have to worry about taxes if I can settle because of the debt recovery act but if they sue me and win a judgment I would have to file BK to get it discharged. We are insolvent if we include the 2nd mortgage and should qualify for a BK7. I am not interested in a BK13, too much chance of failure. Our home is currently worth about 120k according to Realty Trac and we owe 117k to the first (Citi) we owe 107K to the 2nd (HSBC). So we are way upside down and our only assets are our household belongings and used vehicles plus a small IRA that is untouchable.

So I am pretty sure they have no interest in going the foreclosure route on an underwater 2nd and a short sale would not net them anything either. I am fully prepared to wait it out and walk if necessary. I have no interest in holding onto a bad investment that will take take many many years if ever to recover. I have to admit I really do not know what to expect next as I am in uncharted waters especially when it comes to (HSBC), they are not a known quantity and there is very little information available about theme here or anywhere else on the net.

For now I am just putting as much of the missed payments as possible into a separate settlement account and hoping to work it out later. If they try to do anything to collect it will be put into a Roth IRA since I am allowed to put $6k a yr into one and it is untouchable and can not be garnished.

Anyways thanks for your response and welcome any feedback,
Dave

[davephx]

I agree with your observations and your plan with the uncertainties.

[ssanthan]

All,

I have a generic question as to why the Collections dept, keep asking the question "So you refuse the to Pay". If you say "Yes", is that something they can use against us. From reading i get a sense that either you evade that question or say that you can't afford the payment.

The reason i am asking is, i am going to be 4 months behind on my 2nd Mortgage(Purchase) with Wells. I get a lot of robo calling. I have not had a conversation with them yet. My intention is to try to work out a settlement on my underwater 2nd.

[DaveFred]

All,

I have a generic question as to why the Collections dept, keep asking the question "So you refuse the to Pay". If you say "Yes", is that something they can use against us. From reading i get a sense that either you evade that question or say that you can't afford the payment.

The reason i am asking is, i am going to be 4 months behind on my 2nd Mortgage(Purchase) with Wells. I get a lot of robo calling. I have not had a conversation with them yet. My intention is to try to work out a settlement on my underwater 2nd.

I am not sure why they keep pushing the "So you are refusing to Pay". I think that they may well try to use it against you if they go to court later, but I am for sure not going to give in and tell them something like that only to be used against me later. My approach from the start has been to lay most of my cards on the table so there is no misunderstanding that I am serious about walking if they don't offer me a long term (permanent and affordable solution).
So far my take on HSBC is that they do not negotiate until they are backed into a corner and there is no other choice. I am basically not playing into there game of endless temporary no win solutions.They can either work with me on an affordable permanent loan mod, Foreclose and try to sue me for a deficiency or Settle for a fraction some time in the future. Any choice other than a permanent loan mod or settlement will result In my filing a BK7 and they get nothing. Its that simple.
Best of luck, Dave

[troubleinriverside]

hey davefred, did you get a notice of default, with 30 days to cure before intent to Accelerate notice ?? I just did. i think it's standard form letter, but i'm entering uncharted waters here.

[DaveFred]

hey davefred, did you get a notice of default, with 30 days to cure before intent to Accelerate notice ?? I just did. i think it's standard form letter, but i'm entering uncharted waters here.

Not yet, I have not received anything formally in writing yet. I imagine when they decide to charge off I will get something like that. I thought they usually send a notice of intent to accelerate before an actual notice of Default. Maybe it is because you have already filed BK and they have decided to foreclose now ?
How do you intend to respond. I think they may well treat an already bankrupt and noncollectable account different than one that is still active.
Our strategies are similar but different because I am pre-BK and you are now post BK. I am really curious how they might treat one over the other.

One thing that keeps sticking in my mind from my last nasty collections call is the fact that the collections lady told me that HSBC does not settle mortgages and let people keep there homes, They want us to short sell. maybe just empty threats but something to think about.

Stay in touch, Dave

[troubleinriverside]

Davefred, so in your 5 months past due you have received no other letters other than normal mortgage statements ??

The date of this letter is 5/19/10 and was prior to my discharge, and during the period i believe they did not know I was in BK.

The first statement in the letter states that if you are protected by a BK filing this is not an attempt to collect a debt. It states that I am in default and have 30 days to cure the amount stated, or the loan will be accelerated. I just passed the 60 day past due mark by about a week.

Now here is what I find damn interesting. I just pulled up my Trans Union CR this morning, and it shows my BK-7 discharge 5/21, "0' open accounts, and when I page down to HSBC it states, "account closed, (paid)". and it was just updated, go figure, so now I believe they formally know I BK'ed, and they must have charged it off, but this must have happened after they sent this letter.

"the hard thing about playing chicken, is knowing when to flinch"

[toughtimesin08]

Hello.

I just read through your post here on this issue. Let me share some thoughts since I have been through this already.

First off regarding your credit report, it sounds like you included the HSBC loan in your BK 7, so that is why it is showing account closed. Once a loan is discharged in a BK 7 it will show as closed, and probably show as "included in bk" on your credit report, but not always.

If you did not include it in your BK 7, meaning you reaffirmed it during Bk, and it is showing as account closed, paid; then a couple of things may have happened. It may have been paid by a mortgage insurer if HSBC held insurance. If that is the case then you will here from the insurance company soon coming after that money. Or, HSBC could have written it off and probably sold it to another debt collector, who you will no doubt be hearing from as well.

Now, on the the 5 month long drama with HSBC....interesting position to take but certainly not the first or last to take it. They know that you can pretty much write off this debt in bk13, based on the home value you provided. Therefore, HSBC is over a barrel here. They will probably just end up writing off the debt and selling it to another debt collector to see what they can get if anything. Or, if they feel they can squeeze out a little equity beyond the first mortgage value in a foreclosure auction, then they may pursue foreclosure, but as you stated you can halt that process in bk court with a bk 13, and possibly eliminate the second altogether depending on the home value and the valuse of the first.

Good luck to you!

[cszoke76]

I began our loan modification process with Wachovia back in Oct. 2009 and to date we still haven't been able to finalize it. I find it absolutely stomach churning that every single god given financial documentation was provided to them (within 24 to 48 hours after Wachovia's request), and they still managed to delay the review process by claiming that the fax was never rec'd, the date was missing, the name was misspelt, Snoopy ate the mailbox, and Garfield, the ***, jumped on the stack of papers and his lice/fleas ate the documents!......seriously, my 5 year old son has better (and thankfully less) excuses then the Reps at Wachovia.

Well, I don't know about you guys, but quite frankly, I've had enough. Wachovia shouldn't have accepted the bailout money from the gov't (which is really our hard earned tax dollars) if they had no intentions on bailing out anyone other than themselves! I've sued Wachovia in the past (before they acquired World Savings Bank) for extending a prepayment penalty fee and I had the entire matter resolved within 1 week....and mind you, I am not an attorney, never went to law school, and I sued completely on my own. Now, that being said, I took some of my own steps yet again for the 2nd time in hopes of getting what I was promised when we initially went through the phone interview: (1) 2% fixed interest rate; (2) lower monthly payment that included my escrows; (3) keeping my home (especially since we put 20% down payment on the purchase price back in 2005). I am keeping my fingers crossed that I will succeed for the 2nd time but it's never a guarantee!

I think that if we all ban together (picture the Boston Tea Party) and everyone writes or files a complaint to the addresses listed below, then they will have no other choice but to listen and comply. My filed complaint alone is completely useless unless it's backed up by everyone else who is experiencing the same difficulties. Below you will find the steps in filing a lawsuit and complaint in your own County, but please keep in mind that all we can do is try our best and hope it'll work:

1. gather all docs and any fax/mail/email/fed ex confirmations sent to Wachovia;
2. organize in accordance to date, all phone calls made to Wachovia, whom you spoke with, and the topic covered during that conversation;
3. go to your County's website or google "how to file a complaint in _____ County". Once at the website, you can download the forms you need to complete in order to file a lawsuit. Be watchful of the Complaint you submit to Court, because there may be 2 different lawsuit forms: (1) small claims (typically used if you are suing for less than $6,000); and (2) civil complaint.
4. If you do not have access to the web or your county does not provide this online, you can visit your county clerk and ask for the forms directly.
5. in addition to filing your own lawsuit, file a complaint online with the Department of Banking and Insurance and also with Thrift Supervisory.
6. Lastly, once you have a copy of your filed lawsuit at hand, along with all the other online complaints you filed, feel free to drop a few lines to the following people at Wachovia:

Wachovia Corporation
Legal Division
NC0630
One Wachovia Center
301 South College Street
Charlotte, NC 28288
(704) 374-6611

Board of Directors
Wells Fargo & Company
P.O. Box 63750
San Francisco, CA 94163
email: boardcommunications@wellsfargo.com

Wells Fargo & Company
2711 Centerville Road
Suite 400
Wilmington, Delaware
Attn: Mr. Mark C. Oman

Good luck to all and if you have any questions feel free to drop me a line at clichtenstein@hotmail.com. Just remember, I am a regular schmoe like everyone else, sharing my experience that worked for me back in 2008 and hopefully again in 2010! Therefore, I can not give any legal advice, since I am not an attorney and hold no office in that capacity either.

[DaveFred]

Davefred, so in your 5 months past due you have received no other letters other than normal mortgage statements ??

The date of this letter is 5/19/10 and was prior to my discharge, and during the period i believe they did not know I was in BK.

The first statement in the letter states that if you are protected by a BK filing this is not an attempt to collect a debt. It states that I am in default and have 30 days to cure the amount stated, or the loan will be accelerated. I just passed the 60 day past due mark by about a week.

Now here is what I find damn interesting. I just pulled up my Trans Union CR this morning, and it shows my BK-7 discharge 5/21, "0' open accounts, and when I page down to HSBC it states, "account closed, (paid)". and it was just updated, go figure, so now I believe they formally know I BK'ed, and they must have charged it off, but this must have happened after they sent this letter.

"the hard thing about playing chicken, is knowing when to flinch"

Trouble,

I relieved another call today from collections. This time the lady just asked the usual questions and again how I plan to resolve this. I told here as before that I really do not have a plan other then to wait and see if HSBC decides to either Foreclose,Settle or offer a permanent affordable loan mod. SHe told me that as far as a permanent loan mod I would have to re-submit all my documents once again and start from scratch. I more or less told her no thanks been there done that. She then says I need to talk to the Resolutions department about what to expect next and discuss any other options. She attempted to to transfer me but said the line was busy and instead gave me the phone Number (1-800-365-6730 Ext 44412). I told her I would call it later.
So after awhile I decide what the heck and called them and an lady who was actually quite pleasant says how can I help you and I told her I was asked to call her for any suggestions on a resolution. She told me she was in the Dead in Leu and Short sales department. I told her I did not even think a dead in LEU was possible on a second and she said that is true, She asked me if I was interested in a short sale and I told here how would that work if I owe or would never net even enough to pay off the 1st. She just said that sometimes they can negotiate a small settlement from the 1st but it would be very difficult in my situation. So I asked here point blank where do we go from here if I can not afford to pay and she says to me. I am looking at your file and account notes and there is not even anything saying that a notice to accelerate or request for past due payments. I told here that was my understanding too. I then asked well what does that mean. She says well It looks like they are reviewing your account but have not yet decided what to do. I then asked when should I expect them to charge off and what happens next. She said well they would most likely have to charge off at 180 days but she could not tell me what would happen next. It will be reviewed by another department and either be processed in-house or by a Collections company depending on there case load at the time. She then asked if I was interested in a Settlement and I told her yes but at this time I really do not have anything to offer but I might be in the future. She then gave me a Fax number of 1-866-860-8826 and told me if and when I decide to go that route I would need to fax over 2 mos checking statements and at least the past 2 paychecks or if self employed a current P&L plus a hardship letter stating What I had to offer and the reason for the offer. I told her thanks for the information and I would consider it at a later date.

So as far as I can tell my loan is just sitting there in limbo and they really have not figured out what to do next. They certainly do not seem to be in any hurry to start any foreclosure process and are hoping that I will somehow pay up or do a short sale.

In your case Trouble since you have already filed and completed BK7 I really do not know what options they have accept to settle or unless they believe there is some equity to be had by proceeding with a foreclosure sale.

P.S. I listed the Phone numbers for you or anyone else to use if you think they are helpful

Yes we are all in uncharted waters and the seas are angry.
good luck, Dave

[troubleinriverside]

Great info. Thanks for all that. i did some strategic thinking and some research today, and i really believe nothing is going anywhere. About 1 in 5 homes in my neighborhood are in some process of Foreclosure driving values down. the tax assesors website has my property valued right at what I owe on the 1st. I think if they take a close look they would realize they would get nothing, so they will just wait. On top of that with my BK discharge, they have no other recourse but to foreclose and collect nothing. so i would imagine they will just charge it off and wait for me to settle (I hope)

[Daisy Cutter]

trouble, just to make sure I understand, you received an intent to accelerate from your SECOND LOAN? That is really unusual. Are you sure this is a formal ITA or just a letter (like the one I got from PNC) saying they are referring me to their forclosure dept ((rolling eyes)) but really, they have no plans or incentive to foreclose.

PS what is that funky picture you have there, who is that

[troubleinriverside]

trouble, just to make sure I understand, you received an intent to accelerate from your SECOND LOAN? That is really unusual. Are you sure this is a formal ITA or just a letter (like the one I got from PNC) saying they are referring me to their forclosure dept ((rolling eyes)) but really, they have no plans or incentive to foreclose.

PS what is that funky picture you have there, who is that

Well I'm not an expert on them but it says if i don't pay the default amount of $2k and change within 30 days of the letter date they "MAY" (key word) accelerate, and "MAY" start foreclosure. This letter was dated prior to my BK discharge. now that said, since i'm discharged,technically i owe them nothing. if i continue to pay, they will be happy to take it. but i'm not obligated, and their only recourse would be to foreclose, release the lein, or offer me a settlement. but they can not persue me for any deficiency. so i dont believe this is the formal ITA

[lisamomof4]

why do i feel as if this is becoming a theme with 2nds? we discharged BK7 in july '09. did not re-affirm with either 1st or 2nd. focussed on getting 1st mod done then thought to go to 2nd. have never heard word one from 2nd (GMAC) not a phone call, not a letter, not an email, just nothing it's like they dropped off the world. it no longer shows on our credit report and per their rep at the NACA event it shows 'charged off' in their (GMAC) system. to me this says they don't intend to forclose (there is no equity). do we let 'sleeping dogs lye?" while we try to get funds together to offer some kind of settlement?? wait for a phone call/letter that appears to never be coming? call and take the bull by the horns?? i don't really know how to pursue this other than i know i have to do something and it looks like many of us are in the same boat???

[Againsttheodds]

Trouble.. IMO, it's better to offer them a settlement to release the lien. This way, you don't encounter any issues down the road when it's time to sell.

[Daisy Cutter]

it says if i don't pay the default amount of $2k and change within 30 days of the letter date they "MAY" (key word) accelerate, and "MAY" start foreclosure.

Oh wow. Thats scary.

I went an looked at my records on my #$%@ Heloc and mine only says "Your consumer loan acct is being reviewed for referral to our foreclosure dept".

Sheesh I just can't figure out how to get rid of this thing. They won't settle with me, and I haven't paid since Feb. I would like to get an intent to accelerate letter, or a charge off, something.

[toughtimesin08]

lisamomof4 ,

I am in a similar boat. There is no equity in the home to cover my second if it went to foreclosure. My situation is a little different though, in that my original 2nd mortgage holder had a default insurance policy on the mortgage, and filed a claim with the insurance company after our bk7 discharge last October. The insurance company contacted us and said that they are the new mortgage holder and we will be dealing with them now. They were VERY willing to negotiate a payment amount and did not require any signed paperwork, I offered to pay half the original payment and they pretty much said ok, we'll take it. They send monthly payment coupons and that is the only paperwork I ever received from them, other than the original notification that they had paid the claim and will assume the mortgage.
To take it a step further, I received the original security deed back from my original 2nd mortgage holder saying it has been cancelled and satisfied, because they received payment from the insurance claim. I have yet to see any other security interest document filed at the courthouse saying that the mortgage insurance company has a security interest/lien on my home. I have sent the mortgage insurance company a letter asking for proof that they hold a security interest in my home, because if they do not then they can not foreclose, because the loan was discharged in my bk7. If they have no documented evidence of lien or security interest then they can not foreclose....interesting situation.

[DaveFred]

lisamomof4 ,

I am in a similar boat. There is no equity in the home to cover my second if it went to foreclosure. My situation is a little different though, in that my original 2nd mortgage holder had a default insurance policy on the mortgage, and filed a claim with the insurance company after our bk7 discharge last October. The insurance company contacted us and said that they are the new mortgage holder and we will be dealing with them now. They were VERY willing to negotiate a payment amount and did not require any signed paperwork, I offered to pay half the original payment and they pretty much said ok, we'll take it. They send monthly payment coupons and that is the only paperwork I ever received from them, other than the original notification that they had paid the claim and will assume the mortgage.
To take it a step further, I received the original security deed back from my original 2nd mortgage holder saying it has been cancelled and satisfied, because they received payment from the insurance claim. I have yet to see any other security interest document filed at the courthouse saying that the mortgage insurance company has a security interest/lien on my home. I have sent the mortgage insurance company a letter asking for proof that they hold a security interest in my home, because if they do not then they can not foreclose, because the loan was discharged in my bk7. If they have no documented evidence of lien or security interest then they can not foreclose....interesting situation.

Something is fishy here, Why would you pay any money to anyone without a debt validation. I think you can check with the county recorders office to see if there are any recorded liens on your property or at least contact a realistate agent and have then to a title search.
I would never pay anyone without a written agreement stating the terms and conditions of the deal.

[Againsttheodds]

lisamomof4 ,

I am in a similar boat. There is no equity in the home to cover my second if it went to foreclosure. My situation is a little different though, in that my original 2nd mortgage holder had a default insurance policy on the mortgage, and filed a claim with the insurance company after our bk7 discharge last October. The insurance company contacted us and said that they are the new mortgage holder and we will be dealing with them now. They were VERY willing to negotiate a payment amount and did not require any signed paperwork, I offered to pay half the original payment and they pretty much said ok, we'll take it. They send monthly payment coupons and that is the only paperwork I ever received from them, other than the original notification that they had paid the claim and will assume the mortgage.
To take it a step further, I received the original security deed back from my original 2nd mortgage holder saying it has been cancelled and satisfied, because they received payment from the insurance claim. I have yet to see any other security interest document filed at the courthouse saying that the mortgage insurance company has a security interest/lien on my home. I have sent the mortgage insurance company a letter asking for proof that they hold a security interest in my home, because if they do not then they can not foreclose, because the loan was discharged in my bk7. If they have no documented evidence of lien or security interest then they can not foreclose....interesting situation.

Tough.. You do not have to pay the PMI if you've recieved the original security deed back from your 2nd. It's now an unsecured debt meaning the only way for them to collect is to get a court judgement. Instead of paying "half" why don't you offer them a settlement amount for them to go away. I say start at 3% and if they decline tell them if you file for chpt 13 they wouldn't get jacked!!

[toughtimesin08]

DaveFred & Againsttheodds:

It is a fishy situation because normally an insurance company can legally come after you in the situation of an insurance default claim. However, because the original loan was discharged in bk court, the insurance company has no recourse, UNLESS they also assumed the security interest of the loan they just paid a claim on. Since I received the original cancelled and satisfied security deed back from the second mortgage company I was assuming that the insurance company probably had a new lien drawn up at the time the claim was paid to RBC (original mortgage company). However, I have not seen anything filed at the corthouse and it has been 4 months, so I do not think they have a legitimate security interest, and I have challenged them to produce something stating that they do. I sent it this week, so we will see what comes from that.
I just wanted to share that information in case others have a similar situation with a second mortgage and a mortgage insurance company & the second had been discharged in bk court.

[Daisy Cutter]

toughtimes, did you do any thinking about the situation with statute of limitations on your original 2nd? My understanding is that in California it is 4 years. Does the fact that the switch happened with the insurer mean that the SOL starts again (I would imagine it does).

[DaveFred]

toughtimes, did you do any thinking about the situation with statute of limitations on your original 2nd? My understanding is that in California it is 4 years. Does the fact that the switch happened with the insurer mean that the SOL starts again (I would imagine it does).

That brings up another red flag too, because as I understand it the statute of limitations in California is 4 yrs from the last payment or action. So I wonder if making any new payments has stared the SOL all over again? I aslo wonder if the Payment by the insurance was done or is being claimed to have happened Pryor to The BK filling and not included in the BK thus surviving and collectible? Making payments without proof of validation is like admitting you owe it.
Just some random thoughts to think about

[troubleinriverside]

fantastic..........i'm hopeing for a similar situation.

But there is a lot of mis-information being posted. if your 2nd was discharged in your BK, you owe nothing, are not obligated to pay, doesnt matter if the president of the United States insured or bought your discharged debt. They could, however, own your lein, in which case they could foreclose/or offer to settle.

[toughtimesin08]

Thanks for the additional thoughts. How does a statute of limitations come into play, a statute of limitations of what? Sorry, I don't understand that one.

I do have documented proof from RBC that the claim was filed because of the chpter 7 bk, so it definitley occured afterward, I even have the date the claim was filed by RBC. I chose to pay them because they told me that they had security interest in the home because it was transferred from RBC after the claim was paid. However, it wasn't until recently that I received the cancelled security deed from RBC which got me thinking they may be telling a tall tale to get as much money as they can. I am sure they (insurance company) are getting hammered right now and are just trying to stay afloat. At any rate I really don't think it matters that I made a few payments because they either have a security interest or they don't, and that is what this will boil down to. If they do then their lawyers will provide the proof and I will have my lawyer confirm the legitimacy of it, and if they don't then they are out of luck on this one. The loan has been discharged and if they have no lien then they have no leg to stand on in court. Any further attempt to collect at that point would be a violation of the discharge order. If they respond that they do not have a lien then they will probably just admit that they have no further right to collect and that letter will serve as my closing of the second mortgage, officially.

[toughtimesin08]

troubleinriverside,

That is exactly the point (that they may or may not have lien interest) and what I am forcing the insurance company to provide. So far they have just told me that the security interest transferred to them, but I want proof of exactly how and I want it in writing. The original deed has been sent back to me as satisfied, and I was not involved in any sort of transfer of security interest between United Guaranty and RBC, so unless they can provide something that would hold up in court, I am going to tell them to go stick it. If they have no lien then I am not obligated to pay them anything by virtue of the discharge order. I will let you know what they say.

[DaveFred]

Toughtimesin08,

As far as the 4yr statute of limitations I believe it only applies to to unsecured debts. So I am not sure how or if this would apply to your situation unless somehow it survived your BK filing. Liens I believe have no such restrictions on there statute of limitations.
Take any information I may give with a grain of salt, I was just putting it out for others to comment on and food for thought.
Dave

[troubleinriverside]

troubleinriverside,

That is exactly the point (that they may or may not have lien interest) and what I am forcing the insurance company to provide. So far they have just told me that the security interest transferred to them, but I want proof of exactly how and I want it in writing. The original deed has been sent back to me as satisfied, and I was not involved in any sort of transfer of security interest between United Guaranty and RBC, so unless they can provide something that would hold up in court, I am going to tell them to go stick it. If they have no lien then I am not obligated to pay them anything by virtue of the discharge order. I will let you know what they say.

tough, I wasen't directing anything negative at you. just trying to clear up the mis-infornation from of the other posters. there seems to be a lot of mis-understanding on this site about BK, the laws, and how they protect you.

[lisamomof4]

wow, so very much to think about, look in to.
trouble i think you might have a real chance to dispute, as you have the lien and did not sign anything new with insurance??
i know BK laws/rules change a bit from state to state, i'm in illinois so SOL is 7yrs. i thinking my best bet/hope is to go for settlement. i'm thinking to go in very low (as in under 2%). i'm having some issues with finding an estimate of value for the house. will try the tax assesors. i'm still out of work, husband is just back after 1+years of being out and making what he did 15yrs ago. we don't have it to take and hope GMAC will see it also. so far they just seam happy to sit and wait so i'm hoping that is an indication of a willingness to work something out rather than play hardball.

[troubleinriverside]

Davefred, been getting Robo calls from HSBC for the last few days, even calling this holiday weekend. So yesterday i answer, and a nice American lady says is this "Trouble" I say yes, she says this is HSBC, can you pay $2,250 and change today ?? i say no, my debt has been discharged, and i'm glad you called. she say ohh thank you, which chapter ?? I said Ch-7. she says i'll note the account and it will be transfered to the BK department, so we'll see whats next.

BTW- a house 4 doors down finally sold last week after the owner walked on New years day. Rumor was he tried and tried to work with the bank to no avail. He had a 1st and no 2nd. so i had my niece who is a Realtor look it up in the MLS, and she said it had been bank owned by HSBC and just sold. i found that interesting

[DaveFred]

Davefred, been getting Robo calls from HSBC for the last few days, even calling this holiday weekend. So yesterday i answer, and a nice American lady says is this "Trouble" I say yes, she says this is HSBC, can you pay $2,250 and change today ?? i say no, my debt has been discharged, and i'm glad you called. she say ohh thank you, which chapter ?? I said Ch-7. she says i'll note the account and it will be transfered to the BK department, so we'll see whats next.

BTW- a house 4 doors down finally sold last week after the owner walked on New years day. Rumor was he tried and tried to work with the bank to no avail. He had a 1st and no 2nd. so i had my niece who is a Realtor look it up in the MLS, and she said it had been bank owned by HSBC and just sold. i found that interesting

Thanks for keeping us up to date on your situation. It will be interesting to see where you negotiations go from here being post BK. It is somewhat odd to me that they really do not seem to know that you already filed and have been discharged. I get the idea that HSBC really has no clue what they are doing accept to refuse to offer anything that helps the borrower/home owner out.

What kind of price did the recently sold house go for in relationship to current property values over the past 6 months. My home for no reason what so ever according to realty trac went up by nearly 10k in value yet the house next door which is 25% larger and now bank owned is listed at almost the same value as mine ?

keep us posted,Dave

[troubleinriverside]

davefred, it's kind of hard to understand the values around here. in my tract, all homes are on min 1/2 acre, 3 models, one being the most popular is 3100 sq ft 1 story, which is what i have. the 1 that just sold was a 3800 sq ft 2 story in turn key condition. from what I can figure, it sold for just above what it foreclosed at. but the prices are all over the map. if you price things by sq ft. they are going for about $115, but the 1 stories seem to go for more, but they are smaller.......and that makes me nervous, should they try to do some kind of appraisal. but it makes no sense that a home in like condition goes for $50k more, but is 800-100 sq ft smaller.

[DaveFred]

Another day another unproductive call from HSBC.

today once again I got the usual call from the same lady that I spoke to last week and she says to me Hi I spoke to yo last week and was hoping to see what we can do to get this thing cleared up and help you get back on your feet. I said well as I said before I can not make any further payments until We get a permanent and affordable loan mod or settlement offer. She says to me well things are changing just a little here and I sat in on a big meeting last week about how we could help get more people into workable solutions. She then says they told us that we still have to put all potential loan mod customers into a temporary 6 mos hardship program and once we see that they are trying work on a longer term solution. I said like how long term she says well now we are starting to give people 18 mos extensions and you can reapply when you get close to the end. I told her this sounds like a con to me its really not much different than anything you already are doing accept a little bigger carrot on the end of the stick. I said no thanks I already applied twice for a permanent loan mod and I am not interested in any further empty promises. She gets kinda irritated and says well I really care about serving my customers and you just don't seem to want to do anything. Then a different voice comes on the phone and I think its here supervisor and he says I have been monitoring your call and I need to know just what are your intentions as far as keeping your home. I said well my intentions are to stay here as long as I can and try to come up with a workable resolution that works for me long term other wise I guess just let you have the house. He quickly says We DO not Want your House. I said Oh really seems you want it more than me? the then says we have been talking to you for many months now do you know we can go after you for for a deficiency even without filling for foreclosure. I said Hmm, maybe but you would have to sue me in court and i would have even more time to file for BK7 protection and you still get nothing wouldn't it be much cheaper to either do a permanent loan mod with zero or very little interest and atleast get back the principal or just come up with a settlement and be done with it. He then tells me I should go to my State attorney Generals website and research deficiency judgments before I pay an attorney to mess my life up for a very long time. I started to tell him my story about why I could not afford to pay what they were asking and that we just seem to be at an impasse. i could tell he was getting very frustrated because I was not giving him the kind of answers he was looking for and he abruptly said well this conversation is over have a nice day. I said Ok

[troubleinriverside]

great story.........horse crap, you have the upper hand, and he doesn't want to admit it. he doesn't want the house because your upside down and its a 2nd. so then he tries to to gain the advantage by threatening to sue you. ahh but there's that nasty BK card you can play.........and he gets nothing. on top of that Ca is getting ready to pass anti-deficiency laws.....so he gets nothing haha. i love the way you just keep after them like a broken record.

Btw- i found the HSBC website that lists all their foreclosed properties for sale. was suprised at how few were in california.

Well it's going to be interesting to see whats in store for me.

[DaveFred]

I have been doing a little research on California deficiency judgments and 2nd mortgages. I decided a little refresher course on what I believe to the the basics would be in order to help me move forward on my negotiations with HSBC.

From what I can tell so far it seems that the only way a 2nd mortgage lender can get a deficiency is for one of the following things to happen. They could foreclose using the normal non judicial method but they must let it go to trustee sale and accept a bid of less than the full amount owed but if there are no bidders they end up with the house and nothing else because of the California one action rule. Or they could file a judicial foreclosure but it takes a long time and costs them much more to do so. If they did that they can petition the courts to seize assets or garnish wages if the original borrower actually even had anything to come after and assuming they did not file Bankruptcy and have it all extinguished.
The next way and is to push the homeowner to do a short sale since they avoid foreclosure this is the least costly of all the options for the lender and gives them a clear route to come after the borrower for a deficiency judgment. BINGO it now all makes sense why HSBC and most all other banks are pushing so hard for short sales. They realize that they will incur a lot less expense and have a better chance of coming after you if they can avoid foreclosure and there hoping to recover at least some of there losses by suing for deficiency later or hoping that with all the new BK rules that you will be force to file a BK13 and then they will be included in the repayment plan.
The more I think about how this relates to my situation the more confident I am that HSBC really is behind the eight ball and knows it. I am sure they will try there best to coax me into an arrangement that is to there benefit and not mine. The only problem is that I don't see this being solve anytime soon and I will have to fight them to the bitter end.
This is just some random thoughts and I would welcome any incite or information that so far eludes me.

[memb2009]

I also have a 2nd with HSBC. I was placed on two 6 month repayment plans and they denied me for a permanent solution after that. I have my first through GMAC and went through NACA for a reduced interest rate. I also had a forensic audit done at that time. I faxed the forensic audit along with my current property tax statement and letter requesting a lower permanent interest rate. I received a letter from New York requesting financials again. I have missed 2 payments and do not intend to pay anything until they modify the loan. My home is underwater and I have advised them that I have no problems filing for bankruptcy and my goal is to see if the 2nd loan can be stripped. One of the HSBC reps told me that there is no need to take it that far. I live in GA and plan on consutling with a couple of bankruptcy attorneys in the next couple of weeks. The funny thing is they have not called me in the last two weeks.